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Original article: Revés al cobro del CAE: Corte de Talca suspende embargo contra deudor

In a ruling that sets a significant precedent for the thousands of citizens with debts linked to the State-Backed Credit (CAE), the Court of Appeals of Talca has decided to suspend the embargo on a debtor, after accepting the protective action filed against the General Treasury of the Republic (TGR).

In its decision, the appellate court also granted a stay order, halting judicial collection efforts while the justice system reviews the details of the case.

The protective action was filed by a debtor residing in the Curicó area, who described the embargo as an “illegal and arbitrary measure” that disregarded his financial situation entirely.

In the submitted appeal, he detailed that he earns a net monthly income of 1,600,000 pesos, over half of which is already allocated to unavoidable obligations such as child support and the mortgage on the family home, while also supporting two children as dependents. Given this situation, the debtor argued that the embargo is not only disproportionate but also directly jeopardizes his economic stability and that of his entire family unit, as reported by CNN Chile.

The legal action also cited the potential violation of essential constitutional guarantees, including equality before the law, the right to a rational and fair procedure, and property rights.

Additionally, the appellate court ordered the General Treasury of the Republic to prepare and submit a comprehensive report within eight business days, including all available information regarding the collection process, which will be crucial in determining whether the debtor’s rights were violated.

The final ruling from the Court of Talca could serve as a legal reference for similar cases being processed across the country, while the government led by José Antonio Kast is promoting a plan for massive and coercive debt collection through the TGR, justifying it under the recovery of «fiscal assets.»

Indeed, the judicial and administrative collection process for over 550,000 delinquent individuals began on April 6.

La entrada Court of Talca Halts Collection Against State-Backed Loan Debtor: Significant Ruling for Thousands se publicó primero en El Ciudadano.